The newly appointed CEO of WPP, Mark Read outlines the second quarter results and vision of the company.
The second quarter of 2018 was WPP’s first quarter of like-for-like growth since Q1 2017, and the company has performed strongly in terms of winning and retaining business over the period.
“At our first quarter trading update we said there was no standing still, and in the last few months we have made progress in a number of important areas. We have focused our efforts on providing more effectively integrated solutions to clients and, in competitive pitches, we have won or grown business with clients including Adidas, Hilton, Mars, Mondelez, Shell and T-Mobile,” shares Read.
The network has looked at it’s offerings and begun to focus on portfolio through 15 disposals and divestments, including Globant and AppNexus, generating cash proceeds of £676 million so far this year, which will also strengthen it’s balance sheet and improve average net debt to EBITDA ratio.
Read added here, “And we have accelerated initiatives that will simplify our organisation, making it easier for us to manage and clients to access, with, for example, co-locations opened or announced in New York, Kuala Lumpur, Prague and Toronto. The mix of performance by geography and function and a decision to invest in the growing areas of our business resulted in a slightly lower headline PBIT margin.”
As Chief Executive, Read’s focus will be on invigorating the company and returning the business to stronger, sustainable growth. The network’s review of strategy is underway, addressing it’s structure, underperforming operations, particularly in the United States, and how it positions the company for the future.
WPP will provide an update by the year end on it.
Key highlights from WPP- 2018 Interim Results:
∎ Reported revenue down 2.1% at £7.493 billion, impacted by currency headwinds of 5.0%.
Constant currency revenue up 2.9%, like-for-like revenue up 1.6% (Q2 up 2.4%)
∎ Constant currency revenue less pass-through costs up 1.4%, like-for-like revenue less pass-
through costs up 0.3% (Q2 up 0.7%)
∎ Headline profit before interest and tax £821 million down 7.0%, down 2.3% in constant currency
∎ Headline PBIT margin 13.3% down 0.5 margin points reportable and constant currency,
down 0.4 margin points like-for-like
∎ Headline profit before tax £735 million down 7.4%, down 2.5% in constant currency
∎ Profit before tax £846 million up 8.6%, up 14.2% in constant currency primarily reflecting net exceptional gains
∎ Profit after tax £705 million up 11.3%, up 16.8% in constant currency
∎ Headline diluted earnings per share 42.6p down 6.2%, down 1.3% in constant currency
∎ Diluted earnings per share 53.4p up 14.6%, up 20.3% in constant currency
∎ Dividends per share 22.7p flat with 2017
∎ Share buy-backs of £201 million, equivalent to 1.3% of the issued share capital
Check the quarterly results here.